Now is the time to upgrade Europe’s aviation pollution rules

Wed 12 July 2017 – Yesterday, the European Parliament’s environment committee (ENVI) voted on how the aviation sector should be treated under the EU’s Emissions Trading System (EU ETS), in response to a decision by the International Civil Aviation Organization (ICAO) to set up a global offsetting mechanism. The ongoing revision of Europe’s carbon market rules for aviation is a critical opportunity to ensure that one of the biggest global polluters starts to contribute its fair share to EU climate action. While the term ‘sustainable aviation’ seems to be spreading, the reality is that the sector’s emissions are growing unsustainably and will continue to do so. Even if the global aviation deal is fully implemented and enforced, it will not curb the industry’s rising emissions, writes Kelsey Perlman.

So what can be done in Europe now to address aviation’s climate impact?

Transport has become Europe’s biggest pollution problem, and the need to decarbonise the sector is a growing challenge. However, different modes of transport are subject to very different climate ambitions. Electric trains are covered by the EU’s carbon market, and road transport must cut its emissions under a law known as the Effort Sharing Regulation that regulates sectors which are not part of the emissions trading scheme.

Flights within the EU are also included in the EU ETS, but – unlike other sectors – aviation is not expected to annually reduce its emissions. Add the fact that the industry is exempt from fuel taxes, VAT or legally-binding fuel efficiency requirements, and it becomes clear aviation enjoys very special treatment.

It doesn’t come as a surprise then that while greenhouse gas emissions from all other sectors in the EU carbon market fell in 2016, those from aviation grew by 8%. This is a worrying trend that risks putting the goals of the Paris climate agreement out of reach.

Starting from the next phase of the EU ETS in 2021, the European Commission has proposed to apply an annually declining cap also for aviation emissions under the EU ETS – a proposal supported by ENVI. While this will not alone solve aviation’s climate problem, it is a step in the right direction.

A higher price on carbon

With no quick solutions in sight, the sector needs to pay a real price for its pollution. A high enough carbon price would incentivise more efficiency and level the playing field for other, less polluting means of transport, such as railways, thus reducing overall emissions.

Under the EU’s carbon market, the airlines currently get 85% of their pollution permits for free, and pay around €5 ($6) per tonne of CO2 emitted for the rest. It is a far cry from an effective price on pollution – at least $40 by 2020 according to the Carbon Pricing Leadership Coalition’s High Level Commission on Carbon Prices. A parallel revision of the EU’s carbon market rules must reduce the massive surplus on the market in order to bring the prices up to more adequate levels.

In a welcome move, the ENVI lawmakers recommend that airlines should buy 50% of their allowances, as opposed to the current 15%.

The Parliament is expected to adopt its final position at a plenary session in September, with talks to find a final compromise following shortly afterwards involving the Parliament, EU Member States and the Commission.

Despite the low carbon price under the EU ETS, the airline industry wishes to see the EU scheme replaced by the global offsetting measure, fittingly referred to by airlines as their “licence to grow”.

Entering into force in 2021, with a voluntary phase until 2027, ICAO’s global scheme, known as CORSIA, wants airlines to purchase offset credits for their future growth. There are serious doubts about many of these credits, as they might not lead to real emissions reductions, and could even risk human rights violations in the offset project host countries. The average price of offsets is currently an unimpressive 21 cents – 200 times less than the social cost of carbon pollution.

In response to sluggish progress on effective international action, national carbon pricing initiatives for the aviation sector have been popping up recently to ensure airlines pay for their pollution. The UK, Norway and Germany are currently enforcing environmental taxes, with Sweden in the process of introducing a carbon tax for aviation as well. These initiatives put aviation on a path to address its climate impact, but are heavily opposed by the industry, which demands continued exemptions from such efforts to reduce the sector’s greenhouse gas emissions.

Letting aviation industry continue to increase its emissions while others have to reduce them is not only unfair, it is driving dangerous climate change that we have committed to fight under the Paris Agreement.

Europe now has the opportunity to improve aviation pollution rules by asking airlines to pay for and reduce their emissions like everyone else. This is a test of our decision makers’ resolve to stand up for the accord reached in Paris and a safer future.